BSE:541143 | NSE:BDLEQ | 58888: | IND:Defence Contractor | ISIN code:INE171Z01018 | SECT:Defence
It is my privilege to share the achievements and financial highlights of your Company for the financial year 2016-17 along with future growth plans of your Company.
The financial year 2016-17 turned out to be another eventful year, ending with very impressive numbers, surpassing the Moll targets. Your Company achieved the highest ever Sales Turnover of Rs.4886.62 Crore (which includes deferred revenue of Rs.7.05 Crore) and Value of Production of Rs.5011 Crore in FY 2016-17 with a Compound Annual Growth Rate (CAGR) of 39.89% during the last three years. This has been possible with your unstinted support and continued faith in the capabilities of your Company. Your Company is now all set to reach its new milestone of becoming a Rs.5000 Crore Company by the end of this current financial year.
On the financial front, your Company continues to earn Profit with a consistent track record of paying Dividend. Your Board has recommended a Final Dividend of Rs. 157.22 Crore for the year 2016-17. (i.e. 128.67 % on the Paid-up Share Capital of Rs. 122.19 Crore).
HIGHLIGHTS OF THE YEAR
During the year, your Company was able to achieve the installed capacity in the production of Akash SAMs, which showcases our consistency in achieving the same. Your Company has received a fresh indent worth Rs. 1650 Crore for an additional quantity of one of the ATGMs from the Indian Armed forces.
I am very happy to share that your Company has bagged an Export Order worth USD 21.5 Million for export of Light Weight Torpedoes (LWT). This is the first major export order for your Company after opening up of exports for the defence products by the Government of India. I am confident that your Company would definitely capitalize on this opportunity, expand its arms and start focusing on increasing its customer base in the years to come. In this regard your Company had already identified certain potential products which are acceptable for exports.
Your Company is actively participating in various co-development programs of Defence Research and Development Organisation (DRDO).
During the year under report, your Company issued 244375 Bonus Shares in the ratio of 1:4 (one fully paid up equity share of Rs.1000 each for every four equity shares held) to the shareholder. As a consequence the paid up capital of the Company has increased from Rs.97.75 Crore to Rs. 122.19 Crore.
Your Company has been given a target of Rs.5300 Crore of turnover in its MoU with the Ministry of Defence (MoD) for the year 2017-18. Your Company has a healthy order book position of Rs. 11170 Crore as on 31 March 2017 with the inclusion of fresh order for one of the ATGMs. With the proposed Exports, we are expecting an outstanding performance during the year 2017-18.
Further, with the above handful of orders, we believe our production lines would be busy in the years ahead. Your Company will be having challenging times ahead with delivery commitments with respect to major Surface to Air Missile (SAM) &ATGM projects.
In addition to the above, your Company is also constantly participating in various co-development programmes with DRDO. There are a number of new projects in the pipeline, which are expected to be firmed up in the near future.
As stated above, with the encouragement from MoD for exports, your Company has worked on the export potential of our products to friendly nations. I am confident that efforts in this area of export would bear fruits in the coming years.
Moreover, lands acquired at Ibrahimpatnam in Telangana State and Amravati in Maharashtra State will be put into use for new projects. Your Company has been able to augment necessary infrastructure at multi locations, set up manufacturing lines, improve its Vendor base and also create effective Project Management Systems for timely execution of Projects.
During the current financial year, your Company also inaugurated its new Marketing Office in New Delhi, to focus and coordinate export/business development activities.
It is not out of place to mention here that, your Company is very much aware that its Nominated Production Agency status is being slowly transformed into that of a competitive grid mode. In the last two years, private sector participation in India’s defence sector has been on the rise and large Indian private sector conglomerates have increased their exposure to Indian defence market. This is facilitated by several policy interventions by Government support and specifically the ‘Make in India’ Programme. The impact of these initiatives has created more opportunities for domestic industry to tie-up with global defence companies for products and technologies. Increased focus on the Indian defence market by Indian private sector and global players is likely to further increase the competition for your Company in the coming years.
At this juncture, I feel it is my duty to inform that during the current financial year 2017-18, our Administrative Ministry has conveyed approval of the Cabinet Committee on Economic Affairs for listing of Shares of the Company in stock exchanges by way of an offer for sale of a part of the Government holding through Initial Public Offer. In this regard, the Department of Investment and Public Asset Management (DIPAM), Government of India has already initiated the process and have appointed Book Runner Lead Managers to handle the issue. I am privileged to say that your Company would soon become a listed entity and there would be a public participation in your Company.
As always your Company continues to be environment friendly and has been maintaining a clean and green environment in all its manufacturing units. Energy conservation measures are being adopted at all the possible areas. The Company is committed to meet all the stipulated standards for maintaining and protecting the environment.
Your Company, under Green Energy commitment to Hon’ble Prime Minister of India committed to set up 25 MW Grid connected Solar PV power plants in the units. Initially installation of 5 MW Grid connected Solar Power plant at Bhanur unit is in process. The generated solar power will be connected to Telangana state electrical power grid at Nandigama sub-station. Further, your Board also approved for installation of 5 MW grid connected Solar power project at the Ibrahimpatnam unit of your Company. The installation process would commence in the current financial year.
REGULAR INTERACTION WITH CUSTOMERS:
Modernization of Defence is the key growth driver for your Company. Your Company is organizing periodical meetings with Users to know their requirements and also for monitoring the progress and supply status of the indents placed on the Company by the Armed Forces. At times, the meetings are held under the aegis of MoD also. The Company is maintaining total transparency in all its activities while supplying the items to the Armed Forces.
Your Company has been able to increase its Vendor base year by year. We consider our vendors as partners in our growth. Our vendors play a critical role in our success story. As a result, there is a lot of impetus to increase their capacities in order to meet our delivery timelines.
As per our New Vendor Development Policy, your Company is able to further improve Supply Chain Management to meet the long term commitments of the Company and also to ensure a transparent mechanism in identifying and developing new vendors. In line with the guidelines issued by Administrative Ministry, outsourcing and Vendor Development Manual of the Company is under regular review and updation.
Under “MAKE IN INDIA” initiative, we have published a list of items under an import substitutions category which needs to be supplied by indigenous vendors. We depend on our vendors both of domestic and international origin, small, medium and large in size to ensure prompt, quality and cost effective supply of input materials to support our value chain.
Your Company, has adopted the strategy to conclude long term business agreements to ensure timely delivery of materials at fixed prices. Your Company is constantly exploring opportunities for transfer/absorption of technologies by entering into strategic alliances/agreements to increase indigenous content.
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAIN ABILITY DEVELOPMENT:
Corporate Social Responsibility is considered as an embedded programme of the Company. Your Company, being a good Corporate Citizen, has been playing an exemplary role byway of fulfilling Social and Welfare obligations with transparency and commitment.
During the year under report, your Company has spent an amount of Rs.l 3.1 8 Crore on various CSR activities, namely, Mid-day Meal, construction of toilets, Swachh Bharat Abhiyan Skill Development, Safe drinking water, Health care, Renewable energy etc.. Your Company also identified villages in bothTelangana and Andhra Pradesh States under the village adoption programme to carry out CSR activities of the Company.
As a Corporate Social Responsibility initiative, BDL has adopted Kyasaram village of Patancheru Mandal, Telangana State. BDL has constructed a Primary Health Centre, Community Hall, Toilets in individual houses and in Government schools and installed a RO Water Treatment Plant for providing safe drinking water. These were inaugurated on 10June2017.
AWARDS AND RECOGNITIONS:
Shri V.Udaya Bhaskar, CMD, BDL and Shri V.Gurudatta Prasad, Director (Production), BDL receiving the Raksha Mantri’s Institutional Award for Excellence in Performance for the year 2014 - 15 from Hon’ble Union Minister for Defence, Finance and Corporate Affairs, Shri Arun Jaitley at Manekshaw Centre, New Del hi on 30 May 2017.
Shri.K.Divakar, Director (Technical), BDL and Shri M.Sreedhar Rao, AGM (D&E) receiving Group /Individual Award in Innovation category for the year 2014-15 from the Hon’ble Union Minister at Manekshaw Centre, New Delhi on 30 May 2017.
Hon’ble Union Minister for Defence, Finance and Corporate Affairs, Shri Arun Jaitley being briefed about BDL products by CMD, BDL Shri V.Udaya Bhaskar on the side lines of Raksha Mantri’s Awards presentation ceremony held at Manekshaw Centre, New Delhi on 30 May 2017.
Award for ‘Business Excellence’
BDL has been awarded the SKOCH BSE Award for ‘Business Excellence’ by SKOCH Group. The award was received by Shri Shivanand S. Khanapet, GM (NP & R) and Shri S. Muralimohan, AGM (BD) on behalf of BDLon20June2017atMumbai.
Your Company has a well established, transparent and fair administrative set up to provide for professionalism and accountability. The Philosophy of the Company in respect of Corporate Governance is to ensure transparency in all its operations, make appropriate disclosures, comply with laws, maintain ethical standards and take care of the interest of all the stakeholders.
Management Discussion and Analysis Report and a Report on Corporate Governance based on guidelines issued by DPE, Govt, of India to Public Sector Enterprises along with compliance certificate from a Practicing Company Secretary are annexed to Directors’ Report.
Quarterly and Yearly Compliance reports on Corporate Governance are being forwarded to MoD in the prescribed format as per DPE Guidelines.
The Company’s activities are monitored by several external agencies like Statutory Auditors, Comptroller and Auditor General of India, Central Vigilance Commission, Ministry of Defence (Department of Defence Production), etc.
I highly appreciate the support extended by our customers, business associates and various Ministries of Government of India, particularly Ministry of Defence, Department of Defence Production, DRDO and the Three Services and their Inspectorates.
I wish to thank the Statutory Auditors of the Company and Principal Director of Commercial Audit and Ex-Officio Member, Audit Committee of the Board for the valuable advice and cooperation extended by them. The dedication and commitment of our employees and Executives at all levels continues to be the major strength of the Company.
My sincere thanks are due to my colleagues on the Board for their support and valuable advice in all areas of the Management. We shall make continuous efforts to build on these strengths to face future challenges and sustain the growth momentum.
I am confident that with continuous dedicated efforts, commitment and hard work, your Company shall march forward to achieve greater heights in the years to come. We shall look forward to a brighter future ahead.
With best wishes,
V UDAYA BHASKAR
Place: New Delhi Chairman and Managing Director
Date : 03/08/2017 DIN : 06669311
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